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Wednesday, March 30,2011

Phoenix Risen

How ‘the dominoes fell up’ to revive a great building and a determined city

by Lawrence Cosentino
In early autumn of 2006, two anonymous visitors asked for a tour of Lansing’s derelict Ottawa Power Station. It was an unusual request.

The city usually had to coax people into venturing inside the once-splendid landmark on the Grand River, by then an intractable and embarrassing symbol of decay.


The visitors were strangers to Bob Trezise, president and CEO of the Lansing Economic Development Corp. and their contact with the city. When Trezise met them at the power plant gates, they didn’t hand him a business card. Instead, they introduced themselves as Homer and Marge Simpson.


Trezise played along, sensing something big.


They circled the grounds, rattled to the top of the building in a service elevator and picked their way through the pigeon droppings, lingering for an hour and a half.


Many times before, Trezise led quixotic tours of the crumbling, 185,000-square-foot monolith, desperately hoping to interest a deep-pocketed developer. He would point out spectacular views of the Grand River 172.2 feet below, say things like “imagine your office right here,” and sigh as his guests smiled politely and ran away.


But this time felt different. “I’ll never forget when Homer said, ‘This could work for us.’’ Trezise recalled. “It was the first time anyone said that.”


Flash forward to spring 2011.


The people of Lansing are stumbling out of their winter dens, rubbing their eyes, and finding that the transformation of the Ottawa Power Station isn’t a dream.


Pinch yourself as hard as you please. It will still be there. The once-rusting hulk, now etched into the postal rolls as 200 N. Grand Ave., really is a sexy, spiffy national landmark, a giant corporate headquarters, and potential anchor of downtown renewal.


On Tuesday, the building was scheduled to be unveiled to the city. By April 18, some 557 employees of the Lansing-based Accident Fund Insurance Co. of America, complete with mid-morning snacks and kid photos, will be settled in.


The project is more than a high-concept corporate aerie. It’s a national model of private-public partnership and adaptive re-use on a colossal sale, destined to star in hundreds of Power Point lectures at architecture and urban design conferences around the world for decades to come.


The only building in the world that compares to Lansing’s 1939 masterpiece is London’s Tate Modern art gallery, a former power station that can’t hold a candlepower to the Ottawa Station’s dynamic forms and colors. (See related story, “First Life of a Landmark.”) No wonder 1,550 workers spent two and a half years carefully restoring and scooping out the building’s precious shell, tapered like a 170-foot-high flame and colored to match, with masonry that appears to burn from black to orange to yellow as it thrusts upward. (See related stories, “Skeleton crew” and “Hitting the bricks.”)


As a result, a 20th-century wonder — a power plant disguised as a downtown office building — has become a genuine office complex and downtown anchor in the 21st.


How could such an un-disaster happen?


The short answer is that a lot of people badly wanted it to happen.


The long answer is longer.


There were so many moving parts to the project that even one of its prime movers, Dan Loepp, president and CEO of Blue Cross Blue Shield of Michigan, the Accident Fund’s parent company, called it “highly unlikely.”


“The dominoes fell up,” Loepp said.


Idle since 1992 except for a chilled water plant in the basement, the power station shrugged off several attempts to fill it, ranging from technology center to entertainment complex. (See related story, “First Life of a Landmark.”)


All of them fell short for lack of a big enough anchor tenant.


The station’s Art Deco charms faded, year by year, until it began to stink like a beached whale.


“This was the tough nut to crack,” Lansing Mayor Virg Bernero said. “That was the symbol, either of stagnation or success, and we knew it.”


In summer 2006, six months after Bernero became mayor, Trezise urged him to solicit bids from potential developers across the country. In the development world, a “request for proposal” is like the courtship dance of a bird of paradise. Bernero dreaded public rejection.


“What if nobody wants it?” he asked Trezise.


“Then we’ll know,” Trezise responded. “And we won’t waste any more time on it.”


As the mayor feared, out of 1,600 developers, none came back with financing or a major tenant. There were no bites, but two nibbles — brief letters of interest, one of them from Lansing developer Chuck Abraham.


Abraham didn’t have financing or a tenant, but he had a friend in a high place, Blue Cross’ Loepp. Loepp knew Lansing well. He came to Lansing in 1984 to work for the state of Michigan. Abraham was an old family friend.


By 2006, the Accident Fund, the nation’s 15th largest workers’ compensation company, was growing fast and contemplated a doubled staff of about 1,200 employees by 2021. It was quickly blowing out the seams of its old headquarters on Capitol Avenue in downtown Lansing.


The company was considering a move out of the city, or out of the state, to accommodate its growing workforce. Bernero recalled a retention meeting with noncommittal Accident Fund execs early in his term as mayor.


“I came out of the meeting pretty depressed,” Bernero said.


Once Loepp had the power station on his radar screen, things began to change.


Loepp credits Abraham with buttonholing him about the building. “I probably blew him off two or three times,” Loepp said. “It was just sitting there, pretty much an eyesore, but it intrigued me intellectually because of what we had done in Grand Rapids.”


In 2004, the Blues moved their West Michigan operations from the suburbs of Grand Rapids to downtown into the historic eight-story Steketee’s department store building, part of which dates back to the 1860s. The development helped reanimate a moribund section of downtown Grand Rapids, drawing coffee shops, Schuler Books and other businesses.


Loepp asked Jim Cash, vice president for marketing of the Christman Co., a Lansing-based developer working with the Accident Fund, if he had looked at the Ottawa plant.


Christman was looking around the country for a place to put the Accident Fund but hadn’t seriously considered the site, only a five-minute stroll from the Christman building on Capitol Avenue.


“Like everybody else in Lansing, we were a little jaded about the building,” he said. “So many efforts had preceded us.”


But Christman Co. had prestigious restoration projects to its credit, including the 1990s restoration of Lansing’s Capitol building, the Virginia Capitol in Richmond and Christman’s own corporate headquarters in downtown Lansing.


To tighten the feeling that a great circle was closing, Christman’s construction division laid the foundation for the Ottawa Power Station in 1937.


The dominoes started falling up.


Trezise alerted Abraham to the layers of federal and state credits available for the site, including a $26 million Michigan Economic Growth Authority, or MEGA, grant. Offsetting the building’s many burdens were city, state and federal historic credits and brownfield credits.


Abraham admitted he was more intrigued by the stack of credits than he was by the faded glories of the building. Leopp thought of both when he and Abraham looked at the building together.


Enter the Simpsons.


Over Thanksgiving weekend of 2006, a month after the anonymous Ottawa visit, Loepp called Bernero at home and told him that Homer and Marge were Blue Cross facility managers from Detroit.


“That was us,” Loepp told Bernero. “Better sharpen your pencil.”


Loepp told Bernero the city had a chance to partner with the Accident Fund, but it wasn’t a slam dunk.


“He made it clear that they wouldn’t pay for the city’s past sins,” Trezise said.


Loepp gave the mayor a formidable to-do list. The building had no front entrance. The 10,000-ton chiller towers and massive city-owned parking deck crowding the plant’s east face had to go.


To put a new parking deck north of the building, the project needed to expand northward to Shiawassee Street, on privately owned property.


For a year, a handful of insiders, beginning with Bernero, his wife and Trezise, had to keep the big news to themselves. The Accident Fund wanted to keep its options open and make sure all the pieces would go into place before making a public commitment.


Steve Reynolds, the Accident Fund exec assigned to the project, knew it would be a complicated deal.


“There were a lot of unknowns,” Reynolds said. “But we’ve been here since 1912. This would do so many things — renew downtown and keep us rooted in Lansing. And it meant a truly unique workplace.”


When he realized the site was being considered seriously, Cash began to get less jaded. The site also started growing on Accident Fund President CEO Elizabeth Haar, a skeptic at first.


“Nowhere else do you get seven acres, downtown, on the river,” Cash said. “What first was thought to be the most remote of possibilities turned out to be clearly better than anything else that could have been done.”


Bernero and Trezise worked with then-interim general manager of the Lansing Board of Water & Light, veteran engineer Dick Peffley, to clear the way for a property transfer. The chillers, added in 1999, hadn’t depreciated much, but now they would be shredded and Christman would pay $20 million for a new, efficient chilling plant downtown, using the Ottawa project tax credits to offset the cost.


The deal’s last major hurdle was straight out of Hollywood. Longtime attorney Fred Stackable, owner of the Grand Building to the north of the plant, didn’t want to leave the office where he had practiced for decades.


The Accident Fund set a deadline of summer 2007 to wrap up the deal, but Stackable was intractable.


Trezise, Bernero and Cash lobbied him to no avail. Abraham, whom Stackable liked, entered the picture again.


There was no love lost between Stackable and the city, but Abraham liked spending time with the older man and listening to his stories.


“Chuck Abraham was able to relate to Mr. Stackable and buy his property,” Trezise said In Trezise’s account, it was a photo finish, as attorneys raced to Stackable’s cabin near Traverse City in the woods of northern Michigan to sign the papers before the Accident Fund’s deadline. Abraham then conveyed the property to Christman, the Accident Fund’s choice for developer.


As soon as the MEGA grant was approved in October 2007, a grand announcement was made and a larger project team began to assemble.


Tricia Keith, a Blue Cross vice president, was assigned to the project. Keith and Trezise had worked together at the Michigan Economic Development Corp.


Meanwhile, Loepp sensed a “fever” in the community at large.


“Everybody was gung ho and very, very cooperative, and that made a significant difference,” Loepp said. “If you had people pushing back, I’m not sure how far it would have gone.”


Bernero and Trezise had to circle all the wagons for this one. City Attorney Brigham Smith worked on the development agreement for several months. Public Service Director Chad Gamble and head planner Bob Johnson helped mastermind the demolition of the massive Grand Avenue parking ramp and solutions to the traffic headaches that went with it.


Work on the unwanted parking deck over Grand Avenue had to be coordinated with two owners. The city owned the deck and the street below, while Christman owns the adjacent parcel where the plant stands. (Under the development agreement, Christman will lease the new headquarters to the Accident Fund.)


Demolition man Tim Homrich of Homrich Inc., in Carleton, Mich., said there were “no glitches” in this tricky part of the project.


“The city was great to work with,” Homrich said.


Meanwhle, LEDC vice president Karl Dorshimer played a three-dimensional chess game with the interlinked financial incentives, keeping each piece alive at the city, state and federal levels.


The state of Michigan provided the site for a new $20 million chiller plant, in the State Capitol Complex. The new plant was done within a year, paving the way for a dramatic chiller-ectomy.


Reynolds, Cash and a design team from internationally acclaimed architectural firm HOK worked out a sleek new annex that wouldn’t detract from its grand sister. (See related story, “From power to people.”)


The darkest day of the project came on Nov. 6, 2008, when 24-year-old Sam Lowe of Lansing was killed by a 100-foot fall. Lowe was working on the interior demolition work in the power station for Homrich.


But the work rolled on, and soon new floors began to stack up inside the plant.


For many observers, the psychological turning point in the project came when the parking deck over Grand Avenue was torn down in summer 2009, baring the plant’s flame-orange shoulders to the sun.


“It took a while to get used to the tunnel being gone,” Bernero said. “That was new. Wow, the sky, the river!”


There followed a major stroke of luck nobody anticipated. Because the financing was already in place and heavy work was underway, the project scampered to safety just before the economy crashed and the credit doors closed in late 2008.


Bernero marveled at the timing. “To have those big, beautiful cranes in the air, the signs of progress and hope when we needed it was great.”


The project came in on time and on its $182 million budget, according to Christman.


“It was launched ahead of the downturn, and as we finish, we’re coming out of the downturn, so it was timed very well,” Cash said. “The only effect was that everybody around Lansing was happy to have anything to work on at all.” (For more on the project’s economic ripple effect, see related story, “Hardhats and high hopes.”)


But the recession still managed to snap at the project’s tail.


By design, the project team put off financing and building the 1,000-car deck north of the plant, which would take only half as long as the main project to build. That way, everything would be done at the same time and the owners would avoid paying interest on loans for the parking deck.


But when the economy melted down in late 2008, financing dried up. The team scrambled to put together a package of LEDC-financed bonds.


All of the project’s principals, from city officials to Christman, agreed that the most decisive domino in this unlikely series was the Accident Fund’s commitment to the project. Blue Cross’ Loepp said the company’s decision made business sense, but it went beyond that.


Talk to anyone involved with the project, from the muddy job site to glassy boardrooms, and you hear the same superlatives.


“Nobody I’ve talked to have ever had a project like this in their career,” Lawrence Kruth of Lansing’s Douglas Steel Fabricating Corp., declared.


“It’s the most amazing thing I’ve seen, from a business standpoint,” Loepp said.


“It’s not the biggest project we’ve ever done, but it certainly is, in most ways, the most important one to us,” Christman’s Jim Cash said.


Ripley Rasmus, the lead architect on the project, has designed high-profile buildings from Riyadh to Rio de Janeiro for the international HOK design firm.


Rasmus called the Ottawa project “the most significant and interesting restoration I’ve ever been involved in.”


He said the Promethean push to save the big orange flame, with its cast of thousands, is a testament to Lansing’s pluck.


“Building a city is an act of will,” He said. “Great cities don’t build themselves.”


The package of financial incentives, Rasmus said, played a key role.


“If it was up to the marketplace, that site might have been cleared for a new Walmart,” Rasmus said. “If you want to sustain the great qualities of urban environments, you have to work at it, and Lansing has done a great job with this one of making sure that’s happened.”



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